4.6.1 - Last Mile Issues

Version 2

    A mile full of problems


    For companies, transporters and logistics firms the issue of the last mile is of capital importance. Most of them fully master the flows from the production or storage and distribution centers to the final warehouse. They have more difficulty in managing the last portion from the warehouse to the customer, where there are numerous random variables: variety of delivery points and itineraries, diverse range of service providers, difficulty of access and circulation, recipient absent at time of delivery...

     

    This is why the last mile is often the most costly. It represents 20 % of the total cost of the supply chain, according to PIPAME (anticipation and future-oriented ministerial cluster for economic change. For large retail distributors, the cost of the last mile can be as high as 30 % of the value of the goods being delivered to the home (source: emarketing.fr).

     

    This cost can be raised by different factors. Amongst others:

     

    • The need to deliver in zones that are difficult of access, or congested with traffic
    • The problems of parking
    • Recipient absent at the agreed time of delivery, and the need to repeat the logistics process
    • Address and delivery time errors, etc.
    • Widely different regulations from one town to another making a large-scale standard delivery procedure impossible and increasing the complexity of the process. For example certain towns prohibit the circulation in their city centers of vehicles over a certain tonnage or on certain road surfaces; others modulate the times and delivery parking spaces according to the congestion or the ecological performance of the delivery vehicles.


    Example: According to Nice’s Urban Mobility Plan vehicles under 25 m2 can deliver all day, except during rush hours (8-9am and 5.30-7.30pm). During these time slots delivery vehicles are forbidden to park anywhere other than in the dedicated parking places for delivery vehicles.

     

    The last mile: a real puzzler

     

    Managing the last mile is made more complex and more critical by a series of socio-economic developments:

     

    • Growing urbanization, and therefore a growing in the share of last miles in a dense urban environment with issues of automobile congestion and pollution. According to the United Nations, the rate of urbanization worldwide should attain 59.7 % in 2030 and 69.6% in 2050, as opposed to 50.5 % in 2010. In the developed countries it could rise to 85 % in 2050, as opposed to 74 % today.
    • Rising urban property prices, push logistics platforms, warehouses, storage and distribution centers ever further out to the periphery with the result that there is a growing fleet of delivery vehicles converging on city centers
    • Growing number of pedestrian zones where access for delivery vehicles is either prohibited or restricted to certain times of day.
    • Growth of e-commerce results in an exponential jump in the number of home and pick up point deliveries.
    • In 2010, online sales increased by 27 % in Spain, 24 % in France, 18 % in Great Britain and 17 % in Germany (source: Fevad). In 2011, 82 % of French online buyers chose, at least once, a home delivery; 52 % delivery to a pick-up point; 22 % a shop pick-up (source: Baromètre Fevad Médiamétrie).
    • An ageing population contributes to the development of rapid home deliveries.
    • The priority given by local authorities in the urban and transport plans to the mobility of people. Freight is often the poor cousin forgotten by urban mobility policies. However the more the local authorities invest in tramways, bus rapid transit and cycling paths the less space there is available for goods’ deliveries and the more congested they become creating nothing but nuisances and discontent.